Rite Aid Corporation says it is eliminating about 400 corporate positions, more than 20 percent, at its Camp Hill headquarters and at field offices across the company.
About two-thirds of the jobs were cut immediately. The rest will be cut by the end of the fiscal year, Rite Aid said in a news release Tuesday.
Rite Aid said it expects the organizational restructuring to achieve an annual cost savings of about $55 million, of which approximately $42 million will be realized within the fiscal year 2020.
The Camp Hill-based drug store chain said the cost savings “will serve to offset an expected reduction in income” associated with a prior sale of stores during a failed merger with Walgreen’s. Rite Aid sold nearly 2,000 stores to its bigger rival before the merger plans fell apart in 2017.
Rite Aid also announced a change of leadership. John Standley will step down as chief executive officer and a search is underway for his successor.
Bryan Everett, chief operating officer of Rite Aid Stores has been promoted to chief operating officer of the company. He will succeed Kermit Crawford, who is leaving the company.
Bruce Bodaken, chairman of Rite Aid’s board of directors, said Rite Aid is “committed to more closely aligning the structure and leadership of the company with our present scale.” He said the announcement is “an important step in positioning Rite Aid for future success.”
“These are difficult decisions and we recognize the implications they have for individuals across our organization,” Bodaken said in a statement. “However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company.”